. >> i'm talking about falling prices. ofs underlying story

disinflation tells you the challenge the ecb has got, the dilemma they face. you have the likes of france, could be falling into recession. we are not just talking about this rift anymore. the ecb needs to do more. >> you look at all of these kind of numbers, they are not painting a positive picture. if the ecb's mandate is inflation, than it needs to take further policy action. >> let's talk about a forecast. next year, inflation running at 4.1%. that is well below their 2.1% inflation target. 2015 forecast, that is important. everyone response to that is, what is an extended period of time? you have to look at the forecast to gauge. they tell us there is no north/south divide. you only have to listen to the do voices coming out of the ecb right now. they all have a different view. the likes of the german central , they seem to be a

theirre hawkish because respective countries are doing a lot better than the likes of the -- greeses and cypruses. everyone is coming out and saying this. they can't talk down the euro whether they want to or not. at 1.36 just before they cut rates last month. what can they do? >> they are caught between the deep lucy.he if the fed starts tapering then see rising in europe. that is a problem. taper, thedoesn't euro goes up. that is a problem. that is a really difficult problem for the ecb to deal with. >> they are in a tough spot right now. they're in a tough spot because there are well behind the curve. they just embarked on for where the likes of the bank of england, the federal reserve have tied their forward guidance to thresholds.

a lot of people will tell you the ecb is behind the curve. what was the incentive to cut rates last month? there was a big incentive to cut rates last may as well. what are they going to do? we want to keep our patterns right. have been talking to a lot of people and they say the ecb should have acted a long time ago and a lot more aggressively. are they going to come to the table too late? ferro with the very latest on what we can expect from the ecb later today. >> we're going to have it all covered. let's talk about company news that you need to know about. apple and china mobile are on the verge of thinking an iphone deal. that is after the world's biggest phone company won a key license. >> hans nichols has more. how close are we to a deal? how important is this deal for apple? don't know how important it is for apple. apple has pretty solid growth around the globe. they want to get into the china

market. you look at what china mobile has in terms of subscribers. almost 760 million. that is seven times larger, verizon which is the biggest network in the states the second biggest network when you compare it to what is going on in china. in terms of the actual deal, here is what china mobile has always said. they want to wait until they get licenseility, a 4g before introducing the iphone. the wall street journal is reporting the iphone will go on sale later this month and later in december. that could mean an additional 1.5 million new iphones and month. you do that over the entire year, that is 20 million new iphones. it is a remarkable opportunity for apple to get into this market. you look at their actual sales, they are at about 53% of their revenues coming from mobile phones. ipads around 20%. computers around 13%. others, 15%.

you start getting a sense as white tim cook has made two year.to china this he sees growth in terms of moving forward. it looks like they have cleared just one of them. >> explain the four gbit to me. why is that so significant? >> what china had before was a three g network that wasn't with three gible elsewhere around the globe. it was slightly different ethnically. with 4g, the new network, they that now they will be able to handle iphones at their capacity and fully use them. that was always the threshold. this is what china mobile said back in september. now that they have got the license, they have the license to go ahead with 4g. they can introduce the iphone into those markets and the iphone can function the way it globally on a 4g network. >> i do so much for that.

hans nichols with the very latest. i love this story. >> the numbers are amazing. [laughter] >> here is what is else is on the radar. china is banning institutions from bitcoin transactions. they say it isn't a currency with real meaning. that comes after the former fed chairman alan greenspan said that bitcoin prices are unsustainably high. stretchave to really your imagination to in far what value of bitcoin is. i haven't been able to do it. maybe somebody else can. but if you ask me, is this a bubble? yeah, it is a bubble. >> general motors is pulling the chevy out of europe. the carmaker wants to focus on expanding the brand in the region. gm says it will stop chevy

shales here by the end of 2014. >> ford's mustang is gearing up for europe. the iconic american car will go sale in this region. >> the mustang already is a icon. as we speak, we are also launching the car in shanghai and sydney. it is six launches around the world in six cities on four continents. it is a massive following all over the world. people cannot disassociate mustang from ford. the two words go absolutely hand-in-hand. >> coming up, maintaining momentum. george osborne gets set to give the statements as britain's recovery statements. what do businesses want to hear from him? we will delve into that next. ♪

>> american brands are opening their or doors here in the u k. the latest his home where company west elm. our european business correspondent, caroline hyde went to take a look and meet the ceo of the american retailer. this is attracting a lot of u.s. business. >> it is. she is head of the whole of sonoma.s- a propertyg, is it boom in the u k many are feeling that it might be a bubble. sell rather luxurious

bedspreads and great soap is, cushions all the like. she always wanted to expand into europe. you can see the pictures of the store. it is quite inspirational. they are right next to heals, habitat, how are they going to set themselves apart? they are getting involved with local artists. they have installations. it was a good-looking store and i wanted to buy most of it. i asked, why did you come to the u.k., why come to london first? wax it is the gateway to all of europe. we are going to launch the first store. we are looking for other locations for our other brands. we are going to support all of our brands with fully integrated e-commerce. have you growing penetration online and now can you expand into europe using online. >> the way we have grown all of our brands in america is that we have a very large e-commerce business. it is close to 50% of our sales.

it is very instructive in that it shows you where the customers are. if you have e-commerce over a wide range, for example we are u.k. as we of the open the store, shipping, we know where you might want next door. not one location that you are desperate to get into next. >> we are looking all over the place. we would like to fill out london. >> half of sales coming from online, but she was keen to say it is like a theater when you go home shopping. keen -- she wants people to fall in love with the brand and then come back and look at s.e sofa in fact, they offer free designing in your home. they will have a look. >> it does sound like a lot of fun. from home where to close. and thanks.

-- handbags. figures disappointed a lot that the ceo wants to keep expanding. once again falling from albury. it has been quite a roller coaster for the new chief executive. he has lost the creative director. they are investing. new production in the u.k.. they have a new factory in somerset. they have to train people there. hard, butnvesting even though we are seeing sales -- profit down 20%, sales ,alling short of expectations particularly from the department stores, he is still pushing hard on expanding internationally. very dependent on the u.k. in europe. he wants to go into the u.s., asia. that is why they are opening some 15 stores this year. international sales are up some 29%.

they do seem to be convincing the analysts, the investors. expectations finally rising again, up 15%. he is pushing hard. he has a long way to prove. less thanprice is half of where it was back in its peak last year. still, needing to harness the growth of mulberry that he needs expand beyond the u.k. borders. >> thank you so much, caroline hyde with a look at west elm and .ulberry anotherre looking at u.s. company increasing its presence in europe. >> we are talking about cars. up for theg hearing narrow streets of europe for the first time ever. the american car will go on sale in this region. my colleague mark barton spoke president. he joins us now to talk us through the big day. you know what really surprised me? this is the mustang.

>> he wasn't jumping up and down. he was calm. 50 years old next year. >> him or the car? >> good question. probably around 50, but it is 50 .ext year in 2014 you know how iconic this car is. ford, mustang, it is the same thing -- it is linked to that "bullit," steve mcqueen, 1968. >> the noise they make is amazing. >> which he referred to. he said it would have to be the most famous. it is linked to "goldfinger." of course, "diamonds are forever." whyobvious question was, has it taken you 50 years to sell it in europe? >> people are so interested in the mustang.

the import it themselves. are one million facebook followers in europe on the mustang. ford, weuse of global are ever -- able to leverage capabilities to bring not just a left-hand drive version, but a right-hand drive as well. that will satisfy our money customers in the u.k.. mustangmakes this new so special? >> the first thing is, when you look at it, you know it is a mustang. it is an iconic american car. it is a car that is loved and followed all over the world. it has modern technology, but the styling tells you it is a mustang. it is a lighthouse banner car rollout 25 cars in five years in our european launch that we announced a few

months ago. was the first iteration of the mustang, the one that was in "goldfinger." i did ask him at the end. what is your favorite mustang? he said, i was a marketing plan manager in detroit for mustang in 1992 and he said, i have to go with the 1991-1992 mustang which was read, a red convertible with a white interior. , that was the car that made me fall in love with the mustang. >> the 65-67 shelby were nice cars as well. so, ford opening the door with the mustang. gm closing the door with chevy. >> it is incredible. talk about timing. gm announcing today, chevrolet, expandingare doing is . still will be a presence

in russia. you can still buy chevy brand in europe if you want. some iconic brands will remain within europe such as the corvette. why are they removing themselves? deliveries in the first 10 months of the year down by 17%, 1.2% market share. the market share for others is 6.7%. that is the reason why they are energy onll their opel. timing is everything. mustang in, chevrolet out. >> breaking on the same day. mark, thank you very much indeed. let's move on. maintaining momentum, george deliver a set to statement as britain but recovery strengthens. what do businesses want to hear from him? we are going to find out when we come back. ♪

>> welcome back to "the pulse" live from bloomberg television. >> we need to cover the markets now. jonathan ferro, over to you. words, dead flat.

these markets right now, no action on the cac 40. the dax giving 1/10 of one percent. the ftse 100 giving us pretty much nothing after four days of losses. look at some of the levels. up 10% on the year. a little bit of cautiousness creeping in. -- not outsidete the realm of possibility that the fed could reduce stimulus. that debate will be strengthened by the payrolls number. bond market,t the the prospect of the fed buying less treasuries playing into higher u.s. treasury yields on the 10 year. 2.8%, that one near highs for the year. check out fx. look at the euro pound over the last early days. down against the pound. the eurozone story and the u.k. story is night and day. the eurozone could go the other way. much each you how central bank has got to do.

>> thank you very much indeed, john ferro on the markets. >> still to come, u.s. secretary of state john kerry is back in israel to give another push to peac pallk we will be live in tel aviv it are this hour. ♪

>> welcome back to "the pulse" live from bloomberg european headquarters in london. these are the bloomberg top headlines. >> executives in europe's biggest banks are under pressure to surrender their bonuses. yesterday, six banks were fined record 1.7 billion euros from manipulating benchmark interest rates. the antitrust fine pushed sanctions to $6 billion. opposition will hold talks later with the party.

that is after more than 20,000 people joined protest against rejection against a european union trade pact. gives the auto statement today. that is the end of year financial update to parliament. >> we should start calling at the winter statement. it is really not that were met there. manus cranny live outside the house of parliament. over to you. >> [laughter] thanks for that. it is not that warm. what kind of perception will osborne get? joining me now is the director general of the british chambers of commerce. great to have you with us. for your members, it is about business rates. you really push this point. what more would you like to see? what should he be doing?

>> it removes the operation of the september figure. we are way out of line with countries like france and germany where taxes are much lower. at this stage of the economic recovery, small and medium-sized businesses need cash. they could bust because of lack of cash. it really needs reforming. >> let's talk about small and medium enterprises. what does this institution find here -- need to do to give suffrage to the small and medium enterprises? it needs to be frozen and then reviewed. these smes also need to have access to finance. fillre trying to for

orders from overseas, often turning the down because they can't get the working capital. what they need is a business bank. capital ratherve than having to rely purely on equity. other countries have a business bank. the united states, canada, france, italy, germany has a fantastic business bank. very very important. >> we talk about the small and enterprises, the ability to pay taxes is critical. what additional support would hear?ke to do you really think he is going to give you anything in this statement? >> i would hope he would, but the export support area is a critical area. they want to export, they want markets. new they need practical advice. chambers of commerce around the

upld are beginning to gear in overseas markets. was recently visiting british chambers in singapore. the u.k. spends 30 times more on overseas aid than it does on export. that can't be right. funded. to be better businesses need to have the help they need. we are talking about -- >> we are talking about both practical support and tax incentives. it is the balance come first? have i got it wrong? >> i think we can do both. these are relatively role -- inll sums of money comparison with overall public spending. the chancellor could easily afford to freeze business rates. it is less than 0.5% gdp. he could spend it many times over. we are touching on a lot of subjects here. funding for lending has just had a redirection.

are you pleased with that? they get them to work in systemal terms in the here in the u.k.? >> that is a very good question. we are asking for a business bank that reaches out to customers rather than operating through the existing commercial channels. the fact that the bank of england has put the lid on lending for mortgages doesn't necessarily mean the banks will lend to businesses. there is no mechanism for encouraging the banks to do that. >> have you had discussions about this? is what my members need. >> i have. you were very sympathetic to us. what we have got to do is persuade the treasury that it is a good idea. i sent them with the governor of the bank of england and he was

sympathetic to it too. he wouldn't underwrite it. to see alike freestanding business bank underwritten by the bank of england. if the bank has got 80 billion into lending underwriting, why not underwrite for far lessnk than that? >> t, sympathy and you want a bit of capital. great to have you with us today. director general of the british commerce.f back to you. >> thank you very much indeed. manus cranny down at westminster. >> what do businesses want to hear? speech setting up the organic baby food business u.k.e it is these little things. >> since then, the brand has gone global. this year it was snatched up by u.s. food giant celestial.

welcome to the program. very nice to see you. john long was talking about as we start to recover, what need is help with cash flow. reformthe ways is to get of business rates. that is but we need to focus on here. you run your business, how critical is that? >> that is one part of the challenges that we face. and a growing business cash flow -- opening alternative forms of getting finance whether it be schugh this games -- the ways fording other opportunities to invest. more specifically, rants training. if you look on a very macro , our education system is

skills so thatr business can get the candidates they need from the u.k.. on a micro scale, business rates is just one of them. >> this is something you are very passionate about on a personal level. you put a proposal forward. what is the one thing you would do to change it? >> we are all about families, moms and kids and dads. we have a lot of women and a lot of part-time people, people with great skill to work coming back work 80 after having their children. it struck me that the two challenges with skills in our people,is those sort of and there are the young training people. you could have a scheme where you can get part-time work is back on the shoulder parts of that part-time work, getting those guys who haven't training to work, shadow and get some experience in a work environment.

the employer gets to people covering one job. two people get training and the government gives them employment. a real society issue we have got is those million people. >> i am a person that is working for you. i have got kids, i am running around. i need to make my life more flexible. how does this extra person coming in -- person and itthat is tough to get to work at 9:00, at 10:00.can get maybe i can employ someone between 9:00 and 11:00 or between 2:00 and 5:00. i only pay one full-time person. the government supports that but people are learning from each other. they get trained in the job. they might be a marketing assistant, a sales assistant or something. they are starting if they have no new skills. i are learning. get other jobs

from a position of employment which is a much easier than having no experience. >> it is a great scheme in terms of social cohesion and putting people back to work. we have a lot of executives fear that say, my number one problem is finding talented people. this assumes that you find two talented people that work. >> will you find one experienced person and one person who is willing to get that experience. they are untrained, obviously. take a step backwards. the whole education system here need a real look at it. i saw something in the autumn statement that was a real macro thing. it would be about changing our education system so the kids coming through don't have to choose three subjects. they can do the -- with many more. nst the competing agai rest of the world. the real hard thing for a 15- year-old to decide, narrow their down. choices

for an employer, it is very difficult if everyone has a levels. competing against kids from other parts of the world too. >> you just buy your product into walmart you were telling us. i am sure they will go very well. would you like to see more in terms of export support? what else should we be doing to improve this story? >> we saw export as an opportunity from early on. it is about 50% of our business now. here on central europe in the u.k., where english is a common language, we are in a time zone where trade is very easy. is 27 other countries we can trade with freely. flights are cheap everywhere. it is very easy to go and do your research and to places -- visit places where you can export to.

businesses are very similar around the world. if we can have a common otherent of finding each and doing business that works best for each other, that is great. one thing that is happening in the u.k. is international festivals for business. that is where the central lists of the world from a business point of view will be looking at u.k. there will be 100 events or by which britain can showcase what got, the fact that there and learn about products and services and so thatdoing business we can collaborate with the rest of the world. that is happening. there are great services from the business department like the u.k.t.i. there are lots of things going on. people around the world are more at the same than they are different. people in other countries are looking to do business for the same reason we are. >> interesting. thank you so much for all of

that. >> ok, from baby food to bitcoin. china's central bank says it isn't a currency with real meaning. hans nichols has more from berlin. >> what we have from the chinese essentially as strict warning, a stern warning to banks, but not individuals. it is a crucial distinction. they are telling banks that isn't a currency. it can't be traded. you can't give pricing on bitcoin. you can't buy or sell bitcoin. you can't ensure bitcoin linked products. this is according to a statement from the central bank. the market is reacting to the statement and one of the exchanges -- it is down below its $1100 high.

it has crossed underneath that threshold. stilldividuals, they can trade in these products. this does come on the heels of two cases of fraud. one in germany and one in china. it looks like five people are under arrest for bitcoin fraud. people in china are still allowed to trade in bitcoins provided they bear their own risks, right? >> as long as you are an individual, and you find an exchange that you're allowed to trade on, you can do this. it looks like the chinese central bank is taking a first step to try to regulate this and down on any potential fraud or speculation. they don't want it to infect their banking system. >> thank you. nichols. up, u.s. secretary of state john kerry is back in israel to get another push for peace talks with palestinians. we will be live in tel aviv,

next. ♪

>> welcome back to "the pulse" live from bloomberg's european headquarters. >> the u.s. secretary of state back in israel giving another push to peace talks with palestinians. elliott gotkine joins us now from tel aviv. security always high on the agenda.

>> yes. that seems to be the focus of the talks taking place today. john kerry has already met with the prime minister in jerusalem about 90 minutes ago. he is speaking with the palestinian leader later on. one of the biggest stumbling blocks from israel's perspective is the security issue. john kerry is not coming alone today. he has got with him john allen, the former commander of nato , a retiredfghanistan general from the u.s.. he is coming along with not plans, but just some ideas with regard to the security options that could be possibly palatable to israel post any independent palestinian state. they wouldn't specify whether this would relate to the jordan valley which is a very important issue here. that is the border between what would be palestine and jordan. israel wants to maintain presence there even after a peace agreement is signed.

that is a dealbreaker for the palestinians. is focusing on peace talks but they are also going to talk about iran, right? >> it seems very unlikely that netanyahu given that he seems to place the danger from iran as a the danger ofthan any failed peace talks, it seems unlikely that he wouldn't have brought that up. he has labeled that deal between powers as ald historic mistake. interestingly, the expiring of reversible deal with a rent and the deadline for these peace talks, they tend to coincide at the same time. optimist, then in these you could have seemingly intractable problems resolved in about six months time. if you are right as a missed or realist, then perhaps it will just be where we are right now.

>> elliott, thank you so much. >> what else have we got coming you -- when it comes to renewable energy, the british is promoting infrastructure and big payouts by 2020. in the u.k. really afford this story? our next guest wants to see the money first. stay tuned for more in a moment. ♪

>> good morning. we are live on bloomberg television, the radio, streaming on your tablet, your phone and bloomberg.com. let's talk about our new energy second for today. we are going to focus on the autumn statement coming out of the british chancellor of little bit later. there will be a focus on renewable energy. the government has released a rate of subsidy plans. canada for those grand plans? what will that mean for energy prices? let's talk about what we're going to see today. good morning. there is a lot of part of policy going along around these energy stories and their new mobile sector. what we know so far? >> we had some announcements on monday that were designed to get down by about 50 pounds. it was a short-term fix.

yesterday we have the new support mechanisms and strike prices. today, probably not a lot left for the autumn statement about renewables and energy. watch out for the carbon tax. ont puts about 2.50 pounds the wholesale power prices each year. it is quite a big driver on wholesale power costs. will the chancellor stick with keep theill he to bills down in the future, make a change? government that from a political point of view would like to keep energy bills lower switch can fight back against the labor story on the cost of living. time, it has a desire to push forward with renewables it has an implication for higher prices. the government has set a budget for the total amount of money that renault ball and clean energy will receive during

this decade. that is set at 7.6 billion pounds in 2020. that is in 2012 money. it will be about 9 billion pounds. put that in context. last year, we spent about 32 billion pounds on electricity. the governor is saying that by 2020, we will be spending an additional 9 billion pounds on subsidies for renewables. >> what is going to give? politicsng to be the that are going to overcome the rental bowls or will the renewable story stay steady? >> the renewable stared h -- on --is based >> how locked in is the government to that? >> it is part of european law and domestic law. to get off that pathway, we have change the climate change attitudes in 2008. postelection, maybe there will be. postelection it will be see the goal of

the data rebalance explicitly between decarbonization and affordability. we often just fine short-term measures. >> we are going to leave it there. thank you very much indeed. francine, over to you. >> for those listening on bloomberg radio, the first word is up next. for our viewers, a second hour of "the pulse" is coming up. first of all it is the autumn statement. a house of lords member joins us for the full half-hour. we talk the sludge revolution from tel aviv. watch out, not only for the bank but forral that autumn statement. manus cranny will be joined on green eye a couple of guests . it is going to be a big one that you don't want to miss. we are taking those news conferences live and in full. you can follow both guy and i on twitter.

we will see you in just a couple of minutes. ♪

for news fromrace the ecb and the bank of england. that is as george osborne delivers britain's but -- autumn statement. >> u.k. house of lords number -- member will be here. europe with anto new mustang while gm close the door with the chevy brand. >> china mobile close to offering iphones to customers, giving apple access to 759 million new subscribers. good morning to our viewers in europe, good evening to those in

asia, and a very warm welcome to those just waking up in the u.s. i am guy johnson. >> i am francine lacqua. it is pretty cold in london right now. >> let's talk about the big day ahead of us in terms of macro news. the ecb will publish its decision today following last month's rate cuts, no changes expected. all eyes will be on mario draghi's inflation forecast. today.rojections jonathan ferro joins us with details. out,will say rule nothing that is what we learned last month. not many people predicted it. a lot of people thought the ecb would wait for another month of data on the inflation side. another thing was they thought they would wait until he got projections from the ecb itself. if you look at the eurozone and compared to the u.k., it is night and day.

but the forecast for the ecb, they're looking for growth of 1% 1.3%.flation up that could be revised lower. we have protection -- we have 2015, anns to indication of what might happen further on. baby steps with for guidance, rates will stay low. you might get more color if you look at the projections. >> on inflation, talk us through. what exactly do they indicate. will he get more stimulus from mario draghi or is that what he will intimate at the conference that i? -- conference today? inflation has been the dominant story but there has not been much of it. it has accelerated in the past month.

but in the eurozone, inflation does not tell you much. you have to look at individual countries. in greece, cyprus, you saw deflation and those. on aggregate in the eurozone, inflation was below japan for the first time in the euro's history. the ecb faces a two-pronged dilemma. set policy for countries facing a prospect of deflation and set policy for countries like germany, and austria. germany seeing inflation at 1.5% and robust growth. the other side of this dilemma is this. you want to provide accommodative monetary policy but at the same time you want to keep the heat on the politicians on the periphery to push through those reforms. that is one tough task. >> then you think about the fed. headache. another jonathan farrow with the latest on the ecb. watching the bank rate decision at 12:45 london time. we bring you mario draghi's has conference. thepple and china mobile on verge of an iphone deal after the world's biggest phone

company won a 4g deal. how close are we? >> it looks like we are there. the question is one of the iphone going to be on sale in china? the wall street journal is reporting later in december. here's what we have reported -- they have received -- china mobile has received a license that allows them to go forward with their 4g network. before they introduce the iphone, they went to be up and running on the 4g network. to give you a sense of the size of this hour, sev times bigger than verizon. that gives you another 1.5 million iphone customers a month, 20 million more iphone customers a year. you see why and how china opportunity is so central to tim cook's growth strategy. look at their revenue by product. most of it, 53%, comes from

phone sales. 19% from computers. 13% from -- 19% from ipads and 3% forom computers. -- 1 computers. this signals china will be competitive incompatible with network, iphones can be sold and bought in china were globally. it brings all those consumers access to the global i-4 market. it also brings companies like apple access to the china market. it is a revolutionary deal. we will see if it goes through and windows iphones go on sale. francine, guy? >> apple is already sold in china by two other carriers. why does 4g make a difference? >> you want me 4 -- you want the data you can use all the aspects of the iphone. as phones become more like your

computer on your pc, they are data heavy. for that data heavy functionality, you need the 4g network. , thes called the lt4d technology they are running, it is compatible and interfaces with the iphone. now that you're up and running, you will have the iphone able to be used to its full capacity. apple hopes they can have a lot of sales. >> thank you so much for all of that. hans nichols on the apple-china story from berlin. radar? else is on our tunnel motors is pulling chevy out of europe. they want to focus on expanding other branch in the region. it will stop chevy sales by the end of 2015. >> u.s. budget negotiators hoping to avoid another shutdown. democrats would accept revenue

and see republicans agreed to a boost in federal spending. >> china banning financial institutions from bitcoin transactions. the people's bank of china says it does not have real meaning. this comes after alan greenspan prices aren unsustainably high. the e currency has rallied on growing interest from investors. and because of a software program. it is not regulated by a banking authority. >> you have to really stretch your imagination to infer the intrinsic value of bitcoin. i have not been able to do it. maybe somebody else can. bubble?sk me, is this a bitcoin, yeah, it is a bubble. >> economic historian and u.k. house of lords member robert skidelsky joins us on what kind

of economic roadmap we can expect from george osborne. >> the american muscle car gets a facelift. unveil its newest mustang today. details coming up next. ♪

>> good morning everybody. you're watching "the pulse." a couple policy decisions coming out from european central banks.

bank of england first and then the european central bank followed by mario joshi's press conference. this and calculates that story. draghi'sed by mario press conference. this encapsulates that story. bank of england watching the appreciation of sterling with trepidation. it would like to see sterling lower. there is a desire to make exports a bigger part of the british economy. the rise may make this difficult, dampening inflation. pay attention to sterling. it may have a problem in the ecb. will he does inflationary pressure -- will lead this inflationary -- will the disinflationary pressure on the continent force the ecb's hand? today could be an interesting little stop in that story. francine, back to you. >> this is what we are talking

about. george osborne gives the autumn statement in just over an hour. it comes at a time when the uk's the best-performing economy in the g7. manus cranny joins us live. osborne goes to dispatch with a strong set of data. you have a couple guests, what is the cement -- what is the sentiment? the data is a strong. construction, housing, manufacturing, services took a dip. i talked to someone who was skating in terms of you promised we would be at this point a long time ago. great but there are structural problems. brothers gating approach from -- rather skating approach. then we talked to the head of the british chambers of commerce. he said it is about as this rates. they are a perverse tax. we are out of line with small

and medium with other -- we are out of line with other countries for small and medium enterprises. austerity is not done. austerity to be affected between now and 2016. osborne is unlikely to give a great deal away. he wants to stay the course of prudence. >> he certainly does. there have been leaks about the statement. what is left for the chancellor to surprise us with? >> housing is top of the agenda. least of all for the bank of england, -- not least of all for the bank of england, monetary policy. he might have something about the foreign ownership, a banner issue in london. you being tax on the sale of your ownership if you're a foreign owner. something to do with -- this is the politics of politics.

going up against the opposition chancellor saying plan a worked. didn't really work or have things gotten better? they have, thankfully. there will be politics in the houses of parliament, the house of westminster behind me. for married couples. there could be a sting in the tail from foreign owners. 11:15 london time. one day late. much, ourou so markets and are manus cranny. we will bring you chancellor osborne's autumn statement at 11:15 london time. followed by the bank of england rate decision at noon london time, you can watch both here on bloomberg. american brands opening their doors and london. the latest is how where company westbound -- homeware come in the west elm.

caroline hyde went to met the ceo. u.k. the talk of the economy turning around. >> yes, we had j.crew coming as well. i talked to the chief executive of williams sonoma. is it the property boom and everyone wants to redecorate this is aes? she said long-term plan. >> we have international expansion plan. around the world, our ram -- our brands have unique at tributes. in locations like london, people are interested in having other options to decorate their homes and entertaining guests. we found this great location. it was the right time for us to come. we watched in australia with

four of our brands, pottery barn, pottery barn kids, williams sonoma, and west elm. that was our first foray into company-owned international business. >> what sets west elm apart? what makes you different? >> we have a great global ascetic. we offerban market, smaller size furniture, which is conducive to city living. >> you have been at the company for 18 years. what gets you up in the morning? what inspires you? >> i have the best job in the world. we have incredible products. always something to learn. people who are very engaged. it is so exciting to be and this male heir of global growth. -- to be in this new era of global growth. >> she is very keen to say

people take pride in ownership. the founder is now 98 years old. she said three years ago what is your vision for the company and 10 years' time, he said make a great. she says it is all about the store as well as online. >> she said she wants the experience, you come in and touch fabric. >> it is fear. also, the way they are making it local. they have local artists involved in a gallery. age to sherlock holmes. they are trying to make it part of london even though it is an international brand, their u.s. u.s. in feeling. they will do very well over the holidays, you can get candles and veggies and then buy a sofa bed later. >> caroline hyde with the latest from last elm. you're looking at another

u.s. company. >> from handbags to iconic cars. the mustang is coming to europe. it will happen. the iconic car will go on sale in this region. we have been hearing about it all morning. emea joinsident of us now. no better noise than the roar of a mustang. in a number of cities, six cities across four continents. >> why has it taken you 50 years? >> people are so interested in the mustang. they import it themselves. there are one million facebook followers in europe on the mustang. now because of global one ford, we can leverage our engineering capability to not just bring a

left-hand drive version, but a right-hand drive as well, which will satisfy many customers in the u.k. speak withoutot asking about the european car market. they rose in october for the second month, have not done that since 2011. thiseurope loses money year, it will be profitable in 2015. is the turnaround for real? >> it stabilized in a number of markets and is starting to show small signs of recovery in other markets. there are a lot of taxation changes in 2014 that will probably drive the industry that hire in november -- drive the industry a bit higher in november and december. our view is that we are on the cusp of a modest and slow burn recovery. >> interesting that he calls it a coupe.

he has been too much time in america. >> it is a pony. >> big european cars. >> i have jim and a mustang in california. sunning it up. a pony is a larger than typical sports car. powerful, fast. >> they used to have a reputation for not going around corners very well. suspension has improved. they are big, low, like driving a small tank. mustang coming in. ingetting rid of chevy europe. change on our side of the pond. still to come, talking about the sludge revolution. we are talking sledge on "the pulse." we will be doing so with elliott gotkine and. e. he will explain what you are looking at here. ♪

>> welcome back to "the pulse," live on bloomberg television, radio, and streaming on the ipad. >> some company news. caroline hyde has details. >> the biggest gameer -- biggest gainer in the news. the u.k. treasury giving us it's you. it gave some confidence yesterday.

strikenfirmed the final price for biomass conversion. a morekes them attractive m&a target to ubs. rise,ointreau on the biting back to .5 million 2.5es. -- buying back million shares. the german company falling, morgan stanley cuts to equal weight. >> let's talk about sludge. gotkine is here from the tel aviv stock exchange. politely.it this is the semisolid stuff left over after a surveys treatment plant has done its best to make treatment-- a sewage plant has done its best to make

it useful. >> disposing of it is costly and not environmentally friendly. one company in israel has found a solution, applied technology. we have a marketing director with me now. tell us how this works. >> marketing -- applied cleantech has developed a extract so you can useful, oddities instead of turning it into useless sludge of which you need to dispose. >> you distract these biosolids and turn them into things that can be fuel and things like that. >> and constructive and many .ther uses >> how is the rollout going? >> we have been operating in mexico, the u.s., some countries

in europe. >> plans for expansion? where is next? >> we aim to expand in the eu in 2014 end of the u.s. >> how did the idea come about? >> what we basically do is we take the raw sewage and extract the biosolids out of it with technology not using any chemicals or any other things. the process is clean. very low consumption -- energy consumption. the outcome of the process is that it produces up to 50% less sludge to begin with. >> good for everyone. joining us from applied technology.

accent.eeded a northern nice work. >> we will be joined by robert skidelsky talking the autumn statement, next. ♪

>> welcome back to "the pulse," live from bloomberg's european headquarters in london. here are the top headlines. ukraine's opposition will hold talks with president viktor yanukovych's party after more than 20,000 people joined protest against his rejection of a european union trade pacts. protesters have set up calls for the administration to resign. executives from europe's biggest banks under pressure to surrender their bonuses. yesterday, six banks were fined 1.7 billion euros for

manipulating benchmark interest rates. the european commission's antitrust fines were sanctioned ing two $6igg billion. george osborne gives the autumn statement, the end of your financial update to parliament. it is focusing on balancing the books as britain' recovery. >> let's talk more about the statement. i am joined by the bush economic historian and member of the house of lords, robert skidelsky. little bit about what we are going to hear today. if i was george osborne about to hear the economic forecast, i would be very vindicated this morning. partlyerhaps should be vindicated. it is a good thing the recovery has started. it is quite narrowly based and fragile.

of main drivers ar economic growth are still down. house prices are up, stock exchanges up, london is up. in other words, the things that got us into trouble in 2007 and 2008 are up. >> you argued strongly before the recovery took hold that economic policy was wrong and we should be spending more and we needed a more keynesian approach to a policy -- to policy. that that argument was misplaced or do you feel that was correct? >> i do not think it was. the recovery has been much slower than was expected. that has affected the fiscal position. by this time, the forecast was that the budget deficit would be 60 billion pounds. it is 120 billion pounds. that was supposed to start coming down in 2015. it will not peak until two years later.

the fact that the economy has not recovered as fast as projected has caused the budget deficit problem to become much worse than it would've been had the economy grow faster. you might say that was just bad luck. i think the slow recovery, almost lack of recovery for two years, was a result of the austerity policy. a recovery,we have does austerity make more sense? placet faith can we in the new forecast? we were supposed to grow two point four percent this year. it will be about 0.8%. >> they are revising the incomes around 1.5%. >> ok. things are improving. then you go forward to the next year in the year after. then you have to ask what are the drivers of a broad-based recovery going to be? i think that it is very narrow.

prices, assets, and some parts of the country. >> the government has announced plans to spend more on infrastructure. do you welcome that? haveat's what it should been. my policy would have been cut current spending and do not offs et it by capital investment. they did the other way around. they're going to have capital investment now. look for how long it will stretch into the future. the figures are vast. some of them have been announced. 3 decades -- 2 or decades. it should have been started earlier. >> one way of improving the speed of the recovery would do sidea look at the supply of the story.

do you think the tax stories should change? there is evidence that the county corporation tax are having positive impacts. should we do the same in other areas of the tax code? deficit position improved as a result of faster growth, you could have been thinking about tax cuts. of coarse tax cuts are a good stimulus. now they going to be postponed. i don't know the chancellor is going to say. >> that is a static way of looking at it. if you set i will cut taxes now and get a faster economic usefulm, when that be a supply side story? we do not need to think about the deficit and tax cuts as static terms. they do interact and there is a feedback loop. >> you have been thinking about them in static terms. >> treasury did that today -- >> nicely look forward. look forward. if you stimulate, you will get faster growth.

then you will be in a position to do lots of good things. part of simulation would have been tax cuts earlier on. as they were concentrated on deficit reduction and did not see the connection between deficit reduction and growth. they thought deficit reduction was a great policy. that was the mistake. they could not think in these dynamic terms. thaty do you not think this recovery will become a more broad-based recovery? there is some evidence that the export story is improving, manufacturing data has been improving. that data -- they are largely u.k. generated. it is internal rather than export. basic have to go back to theory. there are two drivers of economic growth. investment and there is consumption. you have got to look at what is happening to both of those components. and then you have to ask what are the chances that they will

grow. i do not think investment -- it may have picked up a little bit. it is still very much lower than it was in 2007 in 2008. as for consumption, there has been a big decline in real earnings. over the last five years. >> how do we deal with that? this could come back to the tax story. >> that comes back to the tax story, it comes back to the way national insurance is dealt with. there are ways of doing it. you could have distributive helicopter money and given everyone a christmas present. >> they have done that with 50 pounds off energy prices. >> energy prices should help. in america, the cost and energy -- in, or they call america, the collapse in energy prices, or the big fall, should have a big effect on household consumption. a stagnation had

thereof incomes. now you have a phone energy fall in- now you have a energy prices connected with fracking and shale. which we have not started with. , we will havesky to leave it there. theet's have a look at what european markets are trading at. jonathan ferro is up a touchscreen. >> not a lot of action on european equities. look at the ftse 100, the dax, the capc, flat. a little bit of concern. here on the ftse 100, not a single day of gains for december. brokers will tell you every december for the last 10 years, we have seen a santa claus rally. it may be too early to rule that out. you can see concern in the equity markets, taper gaining traction. you see that in the bond markets. treasury yield on the 10 yield coming up to 2.8%. the prospect the fed could buy a little less treasury over the preceding months.

payrolls number had it will fede the debate on when the will reduce stimulus. i will get to the fx market and bring it home to europe. the eurozone. will they act? this is the euro against the dollar, 1.3597. the day before the last rate cut a month ago, the euro traded at one dollar 35 -- 1.3513. how do you fight the fed? the euro keeps climbing. >> thank you that. watch out for that ecb news conference later with mario draghi. in 20 minutes, it is "surveillance." tom keene joins us from new york with a preview. at thee going to look volcker rule. the secretary of the treasury will announce the path to next week's implementation of the volcker rule. and it's extent it's -- and its acceptance by the banking industry. timothy adams will join us from

the bankers lobbying group. , formally with treasury. he will talk to us about the volcker rule. it is as thick as one of lord skidelsky's biographies. it is up to 950 pages long. it has become a big document from a memo. we will go over that. we will also look at a really exciting news in america. to strike magic a second time with a mustang. you do not remember this, i do. , the auto world change with the mustang. we will speak to mark fields. later, to alan mulally as ford relaunches that classic car. >> i have seen the bullet, tom. my dad had a mustang. i feel it i am a part of american auto industry. when ias a big deal cannot. you have the camaro from gm, it

has been a big challenge. the show. forward to up next, we are back with economic historian and u.k. house of lords member robert skidelsky. we will get his take on the state of the euro zone and u.s. job summers out tomorrow. ♪

welcome back to "the pulse,"

live from london on bloomberg tv and bloomberg radio. it is a big day for central banks. the bank of england releases its rate decision and so does the european central bank. mario draghi expected to keep rates unchanged. investors will be a paying attention to inflation forecasts. i am joined by british economic historian and member of the house of lords robert skidelsky. let me ask you about the eurozone. how concerned are you about deflation? is it overhyped at the moment jacob -- at the moment? withflation is connected the lack of growth. there is little growth in the eurozone in the next year. of course, that means that says go positions will not improve. that means that fiscal positions will not improve. there is the threat of social unrest. the ecb has started the process of quantitative easing. the question is, should it do more?

. the bigger question is, how effective is monetary expansion in stimulating depressed economies? the jury is out on that. people do not know how it works. fiscal policy is more direct. but people gave up on fiscal policy in 2010 because budget deficits were ballooning. something tofind do. to me, what they should be doing on a european wide basis is a big program of capital investment. that is the way to lift the eurozone out of its doldrums. >> which they are trying to do at small, regional levels. >> they are trying to do it slowly and and not a very coordinated way. over a long period of time. is, austerity for years to come. at the end of the day, whenever -- weay will be, there wil

will be more prosperous and the recovery will be more soundly based. >> what do you make of the u.s.? the european economy is trying to become more stable. we are not seeing growth, but it is not as bad as five months ago. the u.s. is starting to fire on all filters. >> it is doing much better. there has been positive growth for some time. i think that is due early to the fact that the fiscal stimulus has continued. it is now being cut off. but these programs did run on because of the way that congress and the treasury interact. secondly, i think they're monetary policy has been more effective. ir monetary policy has been more effective. what is starting to happen, there is being investment -- what is starting to happen, there is starting to be an investment boom. i am thinking of shale gas. a sharp decline in energy

prices. that does help consumption. as well as investment. and companies. both of these components are actually going to be stimulated. where is and in europe, companies are still sitting on piles of cash. profits are up, they don't know what to invest in. >> what is your biggest concern for 2014? we went through a couple thoughts on europe and the u.s. is there a concern that the markets and the business community is not seeing. i think two concerns. one is, i don't think small and medium-size enterprises are getting the finance they need to expand. i have great concern in firing up bubbles that got us in trouble in the past. mark carney has warned about this. i wonder whether the new regulatory system will enable

the bank of england to cut those off. nip them in the bud before they get out of hand. more generally, the fact that some bits of the country are doing very well. if you live in london, we say where is the recession? but if you live in most other parts of the country, they know there is a recession and that recovery has not started. >> lord skidelsky, number of the house of lords. over to you, guy. >> john kerry back in israel to give another push to peace talks with the palestinians. elliott gotkine is keeping an eye on things. security is a key item on the agenda. >> very much the focus for this trip it seems. john kerry arrived late last night. he has met with benjamin netanyahu and his meeting with my mother boss -- with mahmoud abbas in ramallah. he has within the former

commander of nato in afghanistan , a retired general. he is due to present not concrete plans but ideas about security arrangements that would assuage any concerns that israelis have about what a post- independent telecine and stable look like. israelis want troops on the west bank-jordan border. palestinians say that is a dealbreaker. may be there to talk about the palestinian problem. netanyahu likes to talk about iran, as well,. . a biggerm, iran is priority than the palestinian issue. he has described the deal as a historic mistake. interestingly enough, the expiration of that deal six months down the road and the self-imposed deadline for peace negotiations between israel and the palestinians imposed by john kerry 10 to coincide. if you're an optimist, you could see in six months' time, two of

these issues being resolved. if you are a realist, many say they will not be. known middle east is well for bringing optimists. elliott gotkine five-hour middle east editor, joining us from tel aviv. joining us from -- up next, china bans bitcoin. more on that when we come back. ♪

>> good morning, everybody. you're watching "the pulse," live on bloomberg tv, the radio, and on bloomberg.com. let's show you what is happening with some of the euro pairs. they are the euro/sterling. bank of england rate decisions coming up and ecb decisions coming up. attention toay individual rights. we are seeing the european bi -- against theng bid pound and a dollar. we have the perils out of the --. tomorrow, that will have we have the payrolls out of the u.s. tomorrow, that will have attention paid after tabor talk. 1.3595 is where we are trading. a look atchols has what you need to know for the rest of the day. we are watching bitcoin after a

crackdown from china. >> we will have to see how much bitcoin drops. the virtual currency, not a real currency -- that is what china' s issue is. we will see how much it dropped after the u.s. digests the news out of the bank of china, barring institutions from trading the virtual currency or any of assets backed by of. it has been about $1100, now down below. alan greenspan says it is a bubble. we will see if it pops today. >> police are off the trees, but we are talking about the autumn trees,leaves are off the but we are talking about the autumn statement in the u.k. u.k.re austerity for the 17 months before the elections in your neck of the woods, it looks like they are sticking

with austerity. forecasts are a little more bullish than they were this time last year. >> hans, we are looking at apple and china. a huge story. apple will be able to sell their network inside china mobile. some 800 million customers, subscribers. that is seven times bigger than verizon. the question is, will they have any dropped calls? >> talk about the ecb and a moment. let's stay with tech. the google backed bill set for the house vote in washington. are a variety of efforts to regulate and on attand what is going google. anytime the u.s. gets involved, you can expect that it is a first step. if we do see progress on this

legislation today, this is just a first step. a lot more has to happen. google's lobbyists can influence whatever comes out of it. --central-bank staff. central banks day, ecb and boe. >> we have got the u.k. at noon london time and then draghi at :45 frankfurt time. what more can draghi do? what will they give for inflation and economic growth forecasts? since they cut rates in a surprise decision last month, weakening news out of italy and france. how many bullets does mario draghi have left before he goes to unconventional, unorthodox means. doesn't mean quantitative easing for the european union? do not expect that in the statement, but maybe down the line. sidell those on the other

of the brandenburg gate let him do that? thank you very much. pulse,"is if our "the "surveillance" is up next, live from new york. >> more coverage of the autumn statement, coming up. ♪

>> this is "bloomberg surveillance." is 950 pages, the vocal role -- volker rule.

will forever change banking. warm bodies actually signing up on healthcare.gov. i am guessing the u.s. state attorney general will not take uber is more disruptive. i'm tom keene live from world headquarters in new york. it is thursday, december 5. joining me in scarlet fu and alix steel joins us. but it is time right now for a morning brief. bitcoin morning briefing. overnight china announced it will bar financial institutions from handling bitcoins transactions, a move to rein in the virtual currency after an 89 fold jump in the value. alan greenspan's take on bloomberg tv -- it is a bubble. >> it made quite a splash. >> absolutely. europe, 7:00 a.m., bank of england rate decision and then at 7:45